Life insurance is the most overlooked but also one of the most efficient solutions for retirement income planning. Many people don't realize the history of our income tax. After looking over the picture below, do you feel taxes are going up in the future or down? The picture below was taken from a Wall Street Journal article:
When it comes to your retirement planning, would you rather be paying taxes on your income now or 10, 20, or even 30 years from now, when tax rates could be much higher? Do you want the government to control how much money you're getting from your retirement account by possibly raising taxes? How would you feel if it didn't matter what rate taxes were when you starting taking income from your plan when you retire?
Life insurance is not just a tool to provide a person's family some tax-free money when they pass away. It's also used for tax-deferred cash accumulation and tax-free loans while you're alive. Not all life insurance policies accomplish this. It's important for policies to be structured correctly according to an individual's situation, and for policy holders to be advised by a licensed professional when getting life insurance.
Why Do I Call Life Insurance a Super Roth?
Life insurance policies can act like a Roth account, but with some added bonuses:
- Put as much money into it as you want and continue to do so as you wish
- Cash value grows with taxes deferred
- Tax-free loans
- Provide an immediate benefit starting day one as a death benefit (a sum of money free of income tax) to beneficiaries.
- Pull money out whenever you want (very liquid)
- No better wealth transfer vehicle (estate planning, charities, etc.)
- Peace of mind
Contact Wolfgang Financial and Insurance Agency LLC for a free review of your situation today!
*These strategies are not in all life insurance types; policies and are not fully explained in detail. It's important to discuss your potential life insurance or current life insurance with a licensed professional.